Confidential - Decision tree on projects

Something for us to talk about during our next staff meeting.

There are three projects which have significant cash flow problems and thus=
difficulties in meeting debt obligations: these are: SECLP, Panama and Gaz=
a. In the past, as I suppose we have done in Dabhol, we have taken the pos=
ition that we would not inject cash into these companies and would be prepa=
red to face a default and possible acceleration of the loans. SECLP has be=
en the biggest issue/problem. Panama is much less (a few million of floati=
ng of our receivables from the company) would be sufficient to meet the cas=
h crunch in April of this year. Note that, in Panama, the debt is fully gu=
aranteed by the government and is non-recoursed to the operating company, B=
LM. In the past, we have discussed letting the debt default, which would c=
ause the bank to potentially seek complete payment and acceleration from th=
e GoPanama. The reason: the vast majority of BLM's problems stem from acti=
ons taken by the regulator that have effectively amended our PPA's with pri=
vate parties; those actions resulted in significant loss of revenues, which=
although today have stopped or have been limited, have left a "mark" on th=
e company's liquidity position. =20

Now the question is: come April of 2002, should any of our actions in Panam=
a or decisions related thereto (which we would have otherwise taken or made=
) be affected in any way by either the proposed merger or an effort by Enro=
n to preserve efforts to re-establish investor/creditor confidence? The sa=
me could go for SECLP and Gaza.

This is simply an overall "guidance" question. Let's take it up during our=
staff meeting next week, if that's ok with you.

Many thanks, Mariella